India looking to compel e-commerce, social media firms to store customer data locally

Vastavam web: India is considering asking e-commerce and social media firms to exclusively store customer data locally, a move that could affect global giants that operate in the country such as Amazon, Facebook and its messaging service WhatsApp.The plan, which has also raised some concerns among privacy advocates, is laid out in an undated Draft National Policy document seen by Reuters that is mainly aimed at streamlining regulation of the country’s burgeoning e-commerce sector.

The draft policy, which was floated last week according to an e-commerce industry source, also mulls tightening scrutiny of mergers in the e-commerce sector so that even small deals that potentially distort competition are compulsorily examined by the country’s anti-trust regulator.Vinay Kesari, an independent Bengaluru-based lawyer who has advised global technology companies, said the plan was bound to “unsettle” the e-commerce industry “because it is at odds with the fundamental character of the internet”.

The Indian e-commerce market is currently dominated by Amazon and local rival Flipkart that is in the process of being bought by U.S. retail giant Walmart – in a deal opposed by some local traders who fear it could drive mom-and-pop stores out of business.Amazon, Flipkart, Snapdeal, ShopClues, Google and Facebook did not immediately respond to request for comment on the draft policy.

The government, according to the draft, will take steps to incentivize the storage of data of Indians locally.“Data generated by users in India from various sources including e-commerce platforms, social media, search engines etc,” would have to be stored exclusively in India, the draft said, adding companies could be given time to “adjust before localization becomes mandatory”.Raman Chima, global policy director at internet advocacy Access Now, said it was beyond the mandate of an e-commerce policy to begin talking about how all internet players should store data in India.